MNsure health exchange is wobbling on launch pad

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September 23, 2013 at 8:00 am

I have been avoiding writing anything about the Affordable Care Act (ACA), also known as Obamacare, for a long time. Much has been said by others, but it’s difficult to know what’s true and what’s opinion.

Now, however, we are reaching the point where people are actually going to be depending on the government for their health insurance arrangements. So, here’s some facts readers should know.

First, a majority of the public is opposed to the law, and that opposition is growing. A USA Today/Pew Resesarch Center Poll released Monday found that 53 percent of Americans disapprove of the law, while only 42 percent approve. More importantly, the intensity of the opposition is far greater than the support. While 41 percent of Americans strongly disapprove of the act, only 26 percent strongly support it.

Second, many Americans don’t understand the law. Since the law was over 2,000 pages long when passed, and has generated 20,000 more pages of regulations, that’s unsurprising.

Regardless, only 69 percent of American adults even know that the law requires every American to have health insurance.

Only 51 percent know that lower-income Americans are eligible for subsidies to help pay for the insurance. In fact, subsidies are available to anybody making less than 400 percent of the government-defined poverty level. For a family of four, that’s $94,200. The subsidies are graduated, with a cap of a percentage of their income.

Twila Brase, executive director of Citizens’ Council for Health Freedom, an opponent of the ACA who spoke in Browerville in June, says that 700 pages of the original bill are devoted to changes in the IRS tax code. That’s because the federal government is creating a databank to match up individual citizen’s taxable income to their health insurance subsidy.

Make a mistake or forget to report when your income goes up, and you won’t be talking to a health care bureaucrat, Brase said. You’ll be face-to-face with an IRS agent.

Third, only 51 percent of Americans know that some states will form their own health care exchanges, while other states will defer to the federal government to do it for them. Minnesota opted to form its own exchange, named MNsure.

MNsure is off to a rocky start. It has launched a $20 million outreach effort that includes a $9 million ad campaign, a recently opened call center and a certification process for hundreds of “navigators,” trained to help people sign up for insurance.

After handing out $4 million in federal grants to groups to get the word out, MNsure came under criticism for not giving any of the money to organizations serving minorities.

To rectify the oversight, MNsure threw out another $750,000 in grants to minority groups.

Meanwhile, in what it claimed as an accident, MNsure released personal data, including Social Security numbers, on 2,400 insurance brokers. Republican critics hopped right on that, saying Minnesotans will be nervous about keeping their health care information private in the wake of the security breach.

Although open enrollment through MNsure won’t open until Oct. 1, the call-center opened Sept. 3. In the first five hours, 24 operators handled 200 calls, each lasting an average of four minutes.

That means that each operator was on the phone for 33 minutes during those five hours. That leaves a lot of unproductive time.

Fourth, you don’t have to buy your insurance through MNsure. Brase said that the biggest fear of Obamacare supporters is that nobody will sign up.

As long as you have adequate insurance, you won’t be fined, no matter where you bought it. However, if you buy insurance on your own, you won’t be eligible for the tax subsidies.

Even though I think people are taking risk by not having health insurance, there is an economic argument for taking that chance. When Chief Justice Roberts ruled that the ACA was constitutional, he said that it is OK to require a fee for nonparticipation, but not a punitive fine.

Thus, under MNsure, starting in 2014, non-participants will pay a tax penalty of the greater of $95 per adult or 1 percent of taxable income. In 2015, it will be the greater of $325 per adult or 2 percent of taxable income. In 2016, it will be the greater of $695 per adult or 2.5 percent of taxable income. If you make $30,000 per year, 2.5 percent would be $750; $60,000, 2.5 percent would be $1,500.

MNsure requires insurers to offer four levels of plans: Bronze, Silver, Gold and Platinum which vary in deductibles and co-pays.

To cite a few examples, the cost to a 25-year-old county resident on a Bronze plan will be $1,092 per year, a 40-year-old on a Silver plan will pay $1,848, a 60-year-old on a Gold plan will pay $4,584 annually and a family of four on a Platinum plan will pay $7,608 each year.

For those 25-year-olds who want to skip health insurance, paying a tax penalty may be several hundred dollars cheaper than any MNsure plan.

I’ve barely scratched the surface, but’s hard to believe that a project as complex as running the health care industry will be implemented without hurting a lot of people.

Tom West is the editor and general manager of the Peach. Reach him at (320) 352-6569 or [email protected]